Austerity - Make the unemployed beg to be exploited

[cyu]

http://everything2.com/title/austerity

This is the key thing to do when you control the government: borrow as much as you can from the bankers, doesn't really matter what the terms are, as long as it's not so outrageous that your countrymen kick you out.

Then spend that money in whatever way you want, preferably in ways that favor the rich, such as union busting, undermining labor movements around the world, making the world safe for "pro-business" (ie. pro-exploitation) governments, bailing out institutions of the rich.

Finally, now that all the money is spent, get the poor in your country to pay back the money, with a hefty interest, to the rich who control the banks. And if they can't pay? Well, slash all social programs. Say austerity measures are all we can do at this point. Make the unemployed beg to be exploited.

[Die Neue Zeit]

"Borrow as much as you can" is the real secret to neoliberalism, with its pretenses of fiscal conservatism.

[Left Leanings]

Make the unemployed beg to be exploited.

The bosses have brought many of us to the point, where we are on our knees.

I hope fully for the time, when we bring them to their knees :star:

[ForgedConscience]

Interesting, borrowing serves a dual purpose. It has postponed economic collapse by enabling to poor to temporarily keep buying commodities while accumulating massive amounts of personal debt, while at the same time allowing the state apparatus to bail out banks once it turns out that the poor cannot pay back. This has the unintentional effect however of degrading conditions for the people to an eventual breaking point by either doing away with or budget cutting social services (as we are seeing with the NHS and schooling).

It's a not-so perpetual circle jerk, the ruling class class delay the inevitable.

[Die Neue Zeit]

For the record, until I was exposed to Chartalist theory on money, I thought that revolutionary politics could be combined with strictly but real fiscal conservatism (not the empty rhetoric of socially conservative neoliberals, masking their non-budgetary economic agenda), the premise being a culture of state savings and state investments (include tax-to-nationalize setups) during the good times, as opposed to servitude under public and private debt regimes.

It was assumed that said culture, being well past "balanced budget" mantras, would more than provide all the returns needed for costs associated with pro-labour policies, including the increases in real wages that would keep consumer debts down to a minimum. However, the reality is that governments spend first and tax later.

[Vladimir Innit Lenin]

For the record, until I was exposed to Chartalist theory on money, I thought that revolutionary politics could be combined with strictly but real fiscal conservatism (not the empty rhetoric of socially conservative neoliberals, masking their non-budgetary economic agenda), the premise being a culture of state savings and state investments (include tax-to-nationalize setups) during the good times, as opposed to servitude public and private debt regimes.

It was assumed that said culture, being well past "balanced budget" mantras, would more than provide all the returns needed for costs associated with pro-labour policies, including the increases in real wages that would keep consumer debts down to a minimum. However, the reality is that governments spend first and tax later.

You say 'during the good times' as if there would be 'bad times' as well; are you talking about a Capitalist society or a post-revolutionary society? If the latter, surely you're mistaken to think that there would be an 'economic cycle' at all; if goods are allocated based on need, and produced based on ability and genuine workers' democracy, then there will be no market failure, no mis-allocation of goods produced.

[Die Neue Zeit]

You say 'during the good times' as if there would be 'bad times' as well; are you talking about a Capitalist society or a post-revolutionary society? If the latter, surely you're mistaken to think that there would be an 'economic cycle' at all; if goods are allocated based on need, and produced based on ability and genuine workers' democracy, then there will be no market failure, no mis-allocation of goods produced.

One can't dismiss a state-capitalist take on the business cycle during a actual transitional period.

[MarxSchmarx]

You say 'during the good times' as if there would be 'bad times' as well; are you talking about a Capitalist society or a post-revolutionary society? If the latter, surely you're mistaken to think that there would be an 'economic cycle' at all; if goods are allocated based on need, and produced based on ability and genuine workers' democracy, then there will be no market failure, no mis-allocation of goods produced.

That may be, but I suspect there will still be cyclical availabilities in some products that don't depend on market failures, but for which savings could help.

Take for example the product "vacation to the Himalayas". During the monsoon season, the Himalayas would have little or no visitors, presumably little income in the sense of allocated resources for their touristic activities from the planners (because it would be a waste of resources to keep a hotel going at full capacity when no one is visiting). If we use a common basis, say, kilowatt hours, that get allocated to the Himalayan tourism industry, there are "good times" when more than enough resources are allocated (the dry season, spring bloom season, etc...) and "bad times" when less resources are allocated and they more or less have to make do with what's available.

I suspect that even with planning, it would make sense for the Himalayan tour operators or whatever , even in a non-capitalist economy, to try to save the kilowatt hours or use the surplus during the high tourist season to augment other industries that can go strong when their power supply gets reduced as they head into the relatively quiet monsoon season. Now it could be that electricity is so scarce that this kind of "hoarding" by the Himalayan tourist industry is unacceptable. But I suspect in a real economy there would be a little bit of differences on the margin, and for the local people in the Himalayas to save the little surpluses here and there that arise from such unpredictabilities during good times would make sense, whether one is talking about a market or planned economy. Right?

[Die Neue Zeit]

^^^ Comrade, what are your thoughts on what I posted above re. fiscal conservatism?

[MarxSchmarx]

^^^ Comrade, what are your thoughts on what I posted above re. fiscal conservatism?

Comrade:

By "Chartalist theory of money" do you mean basically the Keynesian idea that under capitalism taxation creates sufficient scarcity of money that it abets the value created by government currency, and consequently that deficits under capitalism are of little consequence?

To the extent that your arguments of fiscal conservatism rest on your acceptance of "Chartalism" (admittedly I still fail to thoroughly see the connection, particularly in a planned economy context) I am not sure I really agree with that theory in its entirety. Of course, I think the idea that money can have "fiat value" independent of the value of an underlying commodity like a gold standard is patently true. But I find myself generally in agreement with its historical and materialist critics - namely, that first of all Cartalism does seem to find currency issuer deficits problematic, and that secondly, the value of money seems quite prima facie so independent of the issuers ability to tax (under a floating currency system or otherwise) that its utility in private transactions appears considerably indepedent of the issuers ability to collect. For example, US dollars or Euros are able to cancel private debts in places like Zimbabwe where neither the federal reserve nor the european central bank has any influence. The value of a Euro in Zimbabwe seems by and large independent of what the Zimbabwean government may or may not do, for example, but is set by the interests of private parties independent of what the bureaucrats in Harare want.

Thus if your conclusions rest on the Chartalist view (as I understand it), it seems you should demonstrate how you arrive at them within that framework, and, if your conclusions do not rise or fall based on Chartalism, to distinguish them more clearly.

[Die Neue Zeit]

Comrade:

By "Chartalist theory of money" do you mean basically the Keynesian idea that under capitalism taxation creates sufficient scarcity of money that it abets the value created by government currency, and consequently that deficits under capitalism are of little consequence?

To the extent that your arguments of fiscal conservatism rest on your acceptance of "Chartalism" (admittedly I still fail to thoroughly see the connection, particularly in a planned economy context) I am not sure I really agree with that theory in its entirety.

Actually, I said above that I once thought that planned economies, nationalizations, etc. could operate under a sort of "genuine fiscal conservatism" (lots of budget surpluses), but only in the past year was I acquainted with Chartalism.

Chartalist arguments go against even the most "ideal" of "fiscal conservatism" arguments, because of the taxation problem.

My question to you was about your thoughts on the feasibility of a public finance culture of state savings and state investments during the good times, supposed to provide all the returns needed for various expenditures. If the Chartalist arguments are more rock-solid, then this culture may be a pipe dream.

[MarxSchmarx]

Actually, I said above that I once thought that planned economies, nationalizations, etc. could operate under a sort of "genuine fiscal conservatism" (lots of budget surpluses), but only in the past year was I acquainted with Chartalism.

Chartalist arguments go against even the most "ideal" of "fiscal conservatism" arguments, because of the taxation problem.

My question to you was about your thoughts on the feasibility of a public finance culture of state savings and state investments during the good times, supposed to provide all the returns needed for various expenditures. If the Chartalist arguments are more rock-solid, then this culture may be a pipe dream.

Without getting too jargony, it seems that even at the firm-level this issue would come up right? suppose the average return during good times is x and the average return during bad times is y, and that through the vaguaries of markets , random events, butterflies in beijing, whatever, one gets x + dx during good times. Using the surplus, one invests and gets the return f(dx) at some later time. one can apply this to cover exceptionaly poor times when one gets y-dy so that y - dy + f(dx) > 0, or even, ideally y - dy + f(dx) > y. Under a purely planned economy or an effectively infinitely efficient market, dy=dx=f(dx)=0. But since in reality dy, dx, f(dx) can take on any old values pretty much, why wouldn't that be feasible, particularly if the deviation of f(dx) from zero is expected to be skewed positively whilst dy, dx are not?

[Die Neue Zeit]

I never thought of that from a more mathematical perspective before. :)

[cyu]

IMF Gets A Warm Welcome In Spain

http://www.zerohedge.com/news/2014-03-03/imf-gets-warm-welcome-spain

Despite near record low bond yields, a surging stock market and a leadership proclaiming victory, the people of Spain appear upset at the IMF's appearance in their nation. Around 2,000 people protested in Bilbao today as the IMF (member of the infamous Troika) overturning cars and windows, graffiti-ing "IMF Out!" and held banners saying "Troika Go Home", denouncing economic policies that welcome austerity measures and the introduction of cuts.

perhaps it is the record unemployment, record suicides, record homelessness, and record loan delinquencies that tarnish the rose-colored glasses that 'the powers that be' would prefer the general public to see the world through.

[Loony Le Fist]

It is absolutely ridiculous what has happened throughout Europe with the Troika and their preposterous austerity measures. It is not the people's fault that their government misrepresented their financial position in the case of Greece, for instance. I think there needs to be a bit of rebellion when it comes to the austerity measures.

It's time these countries started issuing currency to pay for these necessary social programs. It might devalue the currency, but then you would have to come in with hefty taxes on the thieves that created the situation in the first place to keep inflation in line. Frankly, bypassing of central banks with direct issuance of currency and strong taxation on the financiers appears to be the only way out of this. If the EU doesn't like it, they can shove it.